Does a “Gray Marriage” Affect My Social Security?

Widowed or divorced Social Security beneficiaries can run into issues, if they decide to remarry later in life. Those who remarry in their 50s or 60s should know about the ways your new marital status can impact your Social Security benefits.

Investopedia’s recent article, “How Remarrying Late in Life Impacts SS Benefits,” gives us some things to consider.

First, if either you or your intended is widowed and receiving Social Security benefits based on the deceased spouse’s work record, age is important. A surviving spouse who remarries prior to age 60, becomes ineligible to receive benefits on their late spouse’s record. However, after your first anniversary with your new spouse, you become eligible for spousal benefits, based on that person’s work record.

Decide whether to wait for marriage in order to keep a widow’s benefit for longer, or if the spousal benefit from their new union will offer more financial security. If you’re married at least nine months prior to one spouse’s death, the surviving spouse is eligible for spousal benefits based on the second marriage.

If one or both members of the new couple is divorced, things are trickier because the Social Security Administration does allow a divorced spouse to collect spousal benefits based upon the work records of their deceased ex-spouse, as long as the divorced beneficiary meets the following criteria:

  • The original marriage lasted at least 10 years;
  • The beneficiary applying for divorced spousal benefits has remained unmarried; and
  • The beneficiary applying for divorced spousal benefits is at least 62.

If you are divorced from an ex who significantly out-earned you and your new fiancé, remarrying stops the ex-spousal benefits you’d otherwise receive. This can make a big difference in your finances, and cohabitating without getting hitched, may make more financial sense for some couples.

Beneficiaries who are receiving Social Security Disability Insurance (SSDI) may have the toughest calculations, as far as a second marriages are concerned. This is because SSDI beneficiaries are subject to a family maximum benefit (FMB) calculation. The FMB limits the amount of money available for auxiliary benefits, like the dependent child benefit. Figure out and compare these three amounts to determine FMB:

  1. 85% of the worker’s average indexed monthly earnings (AIME).
  2. The worker’s primary insurance amount (PIA), based on full retirement age.
  3. 150% of the worker’s PIA.

If number three is the highest of these three calculations, then the FMB is the higher of number one or two. However, if number one is the highest of the three calculations, then the FMB is number three.

It’s important that later-in-life couples don’t forget that there can be some unanticipated consequences to their new unions. Know the potential effects that marriage can have on your Social Security benefits, before you walk down the aisle. While you’re at it, make sure to meet with your estate planning attorney to update your wills and your estate plan, especially if one or both of you have children from a prior marriage.

Reference: Investopedia (August 1, 2018) “How Remarrying Late in Life Impacts SS Benefits”

Suggested Key Terms: Estate Planning, Tax Planning, Financial Planning, Retirement Planning, Social Security, Social Security Disability Insurance (SSDI)

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